Nissan to buy up to 15% stake in Renault EV unit under reshaped alliance

Nissan and Renault on Monday announced details of their redesigned alliance, with the Japanese carmaker to buy up to a 15% stake in Renault’s Ampere electric vehicle unit.

Alliance junior partner Mitsubishi Motors will also consider investing in Ampere, which Renault is aiming to list, the company said in a statement.

“Nissan’s aim is to invest up to 15% in Ampere, Renault Group’s EV & Software entity in Europe, with the aim of becoming a strategic investor,” it said in a statement ahead of the presentation in London.

The companies have announced that in an agreement to revive their long-standing alliance, the French carmaker will reduce its stake in its Japanese partner to 15% from around 43% currently.

Renault will transfer a 28.4% stake in Nissan to the French trust, making the two equal partners in the alliance.

Sources close to the matter said the agreement aims to make the alliance freer and more balanced over the next 15 years.

The partnership will generate synergies from joint projects in Europe, India and Latin America, and the companies will work together on Renault’s flagship EV, electronics and solid-state battery businesses.

Renault will have the flexibility to sell the Nissan shares it holds in trust but “is under no obligation to sell the shares within a specified period of time,” it said in a statement on Monday.

When sold, “Nissan will have the benefit of the right of first offer, or the benefit of a designated third party.”

The two companies last month announced a remake of the 24-year-old auto alliance, which was dissolved by the ousting of its architect and former chairman, Carlos Ghosn, amid financial scandals.

This announcement comes after nearly four months of intense negotiations complicated by concerns about sharing intellectual property as Renault seeks to link with companies outside the alliance.

Renault’s board approved the deal on Sunday night, according to sources. Nissan’s board also approved it earlier on Monday, the source said.

Investors and analysts will be looking for more clarity on how confident Renault will be with its large stake in Nissan.

“There’s really no word on what’s going to happen with those shares in the trust,” said CLSA analyst Christopher Richter. “It seems like everyone is avoiding the problem of Nissan buying back, which I think would be in the best interest of all parties involved.”

Richter said the Renault brand is not seen as a strong brand, so the French automaker may find it difficult to raise money for the Ampere.

“I wonder if this goes to the market how much money will really raise, he said. “That’s why we want to push Nissan to pay too much.”

The unequal relationship between the automakers has long been a source of friction among Nissan executives.

When Renault rescued Nissan two decades ago, it was a much smaller carmaker.

CLSA’s Richter said the revamped alliance could allow Nissan and Renault to work together on R&D, shared costs and some shared products “with resentment and acrimony between them,” but added Honda and General Motors has built a partnership that includes developing low-cost EVs together without the need for capital ties.

“One almost wonders why they have a stake in either, any stock,” Richter said.